In 1709 (or was it 1710?) the Statute of Anne created the first purpose-built copyright law. This blog, founded just 300 short and unextended years later, is dedicated to all things copyright, warts and all. To contact the 1709 Blog, email Eleonora at eleonorarosati[at]gmail.com

Thursday, 13 September 2012

No appeal for Optus - the time-shifting exception does not extend beyond private individuals

Back in February, Ben blogged
about Optus v Telstra, an
Australian case in which concerned an app developed by Optus enabling users to
record free-to-air TV broadcasts and to save them to Optus' cloud in order to
view them later. Last week, the High Court of Australia decided not to hear
Optus' appeal of the Full Federal Court ruling that the app infringes copyright,
and this week Telstra
has said that it welcomes the High Court's "positive" decision,
saying that it "provides welcome clarity for cloud operators, while at the
same time recognises the delicate balance of interests which copyright law
seeks to protect."

Background

The National Rugby League (NRL) and the
Australian Football League (AFL) had granted Australia's leading service
provider, Telstra, exclusive multi-million dollar licences in respect of mobile
broadcasting rights of their games.

In July 2011, Optus launched its TV Now
service, which enabled users to record TV programs, including NRL and AFL games, and to play them back at a
time convenient to the user on any PC, Apple, Android or 3G device.

When a user clicked record on TV Now's
electronic program guide, Optus made four copies of the relevant program, one
for each of the possible viewing platforms. These copies were stored by Optus,
and could then be streamed as convenient by the user on any one of the four
types of devices.

NLR and AFL were of course concerned about
the effect that the app could have on their exclusive licensing deal with
Telstra. They claimed that the TV Now service infringed their copyright in
broadcasts in a number of AFL and NRL games and said that they would seek an
injunction against Optus. Optus therefore made a claim in the Federal Court of
Australia that AFL and NRL had made unjustified threats of infringement under
s.202 of the Copyright Act 1968 . The Court later added Telstra as a party to
assert similar claims to AFL and NRL as exclusive licensee.

The Federal Court's decision

In February of this year the Full Federal
Court held that
Optus's TV Now service did not infringe copyright in the broadcasts of the AFL
and NRL game, in the particular ways that the rightsholders alleged.

Rares J held that it was the users of the
Optus service, rather than Optus itself, who made the copies of the broadcasts,
when they selected a program from an electronic program guide and clicked
'record'. Further he held that when recordings were streamed to the user there
was no communication to the public.

The Court went on to say however that other
issues still needed to be resolved, including whether Optus infringed copyright
because of temporary copies made during the streaming process.

The Full Federal Court's decision

AFL, NRL and Telstra subsequently
appealed the decision to the Full Federal Court. The appeal was heard in March
and judgment
was handed down at the end of April 2012.

The Full Federal Court found that it was
not the user alone who made a copy of the games recorded, rather it was either Optus
who made the copy (on the basis that it provided the service enabling users to
make recordings) or alternatively both Optus and the user made the copy (acting
together: the user initiating the process by requesting the copy and Optus providing
the means for making it). The Court's preferred view was that both Optus and
the user were jointly and severally responsible for making the copy.

The Full Federal Court then went on to
consider whether "what we would inaccurately, but conveniently, call the "private
and domestic use" defence of s 111 of the Act" applied. The Federal
Court had not had to consider this, given its answer to the first question. The
Full Federal Court found that the exception did not apply because there was
nothing in the language, or the provenance, of s.111 to suggest that it was
intended to cover commercial copying on behalf of individuals.

Further Appeal

Last week, the High Court rejected a
special leave application from Optus, seeking to overturn the Full Federal
Court's decision. The Full Federal Court's decision therefore still stands and
Optus remains liable for copies made as part of its TV Now service.

This case puts a platform operator firmly
on the hook for providing a time-shifting service. The Full Federal Court found
that while the s.111 (the time-shifting exception) was intended to allow
private copying by individuals, it wasn't the place of the Courts to extend that
exception beyond those confines. This is quite a turnaround from the
pre-internet position where in the UK the provision of a tape recorder was not
found to be authorising infringement (CBS
v Amstrad), and in the US making copies of TV shows using Betamax
videos was not infringing because it was fair use (SonyCorp
v Universal City Studios).

Since the internet has facilitated
copying courts seem more ready to find that platform providers participate in
copying. The position in the US
looks similar to that in Australia. In the UK, UKNova
recently backed down after a C&D from FACT, and we await the CJEU's
decision in ITV
v TV CatchUp.

1 comment:

I think the better comparison between the Optus case and US law, however, is the 2nd Circuit's decision in Cartoon Network v CSC http://en.wikipedia.org/wiki/Cartoon_Network,_LP_v._CSC_Holdings,_Inc.. While the facts were similar, the results are diametrically opposed and, of course, s 111 has no counterpart in the US.

For businesses in Australia, the Full Court's ruling raises the much larger question of the potential exposure of "cloud lockers" and "photo buckets" to liability for what users do.

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